Sodium arsenite exposure at concentration >5 μM may induce embryotoxic and teratogenic effects in animal models. Long-term health effects of sodium arsenite from contaminated drinking water may result in different forms of cancer and neurological abnormalities. As cancer development processes seem to be originated in stem cells, we have chosen to examine the effects of sodium arsenite on signaling pathways and the corresponding transcription factors that regulate cell viability and self-renewal in mouse embryonic stem cells (ESC) and mouse neural stem/precursor cells. We demonstrated that the crucial signaling pathway, which was substantially suppressed by sodium arsenite exposure (4 μM) in ESC, was the PI3K-AKT pathway linked with numerous downstream targets that control cell survival and apoptosis. Furthermore, the whole core transcription factor circuitry that control self-renewal of mouse ESC (Stat3-P-Tyr705, Oct4, Sox2 and Nanog) was strongly down-regulated by sodium arsenite (4 μM) exposure. This was followed by G2/M arrest and induction of the mitochondrial apoptotic pathway that might be suppressed by caspase-9 and caspase-3 inhibitors. In contrast to mouse ESC with very low endogenous IL6, mouse neural stem/precursor cells (C17.2 clone immortalized by v-myc) with high endogenous production of IL6 exhibited a strong resistance to cytotoxic effects of sodium arsenite that could be decreased by inhibitory anti-IL6 antibody or Stat3 inhibition. In summary, our data demonstrated suppression of self-renewal and induction of apoptosis in mouse ESC by sodium arsenite exposure, which was further accelerated due to simultaneous inhibition of the protective PI3K-AKT and Stat3-dependent pathways.